It's now the USD turn to react to lower PMI. The US manufacturing and services PMI came in weaker than expected. The manufacturing came in at 47.0 versus 49.3. The services index dipperd to 51.0 from 52.2. The composite index remained just above the 50 level at 50.4 versus 52.0 last month.
In Europe, their flash PMI data all came below the 50 level sending the EUR and GBP lower. Now it is the USDs turn to head lower. Yields are moving lower which is helping, but European yields are also lower.
The US 10-year yield is currently down -11.3 basis points at 4.215%. The 2-year yield is down -9 basis points of 4.949%.
FYI,
- UK 10 year yields are down -16.5 basis points,
- German 10 year yields are down -12.0 basis points
- France 10 year yields are down -12.4 basis points
- Spain 10 years yields are down -13.2 basis points
- Italy 10 years are down -13.9 basis points
Looking at some of the major currency pairs:
EURUSD: The buyers against the 200 day moving average at 1.0798 (the low price reach 1.0802)are being rewarded with a move back up to 1.0845 after the data. The price is back within the key swing area between 1.0833 and 1.0848. Will seller's lean against that area and push back to the downside? Be aware. Key resistance.
USDJPY: The USDJPY rebounded up to its 200 hour moving average in the early US session at 145.58 and found willing sellers. The weaker data has now sent the price below the next target swing area at 144.88, – 145.10. Staying below that area is more bearish in the short term. The break lower has taken the price now toward the next key target at the 38.2% retracement of the August trading range. That level comes in at 144.624. Getting below that retracement level is the minimum retracement of a trend like move, and would increase the bearish bias with the traders next targeting 144.06 – 144.22..
GBPUSD: The GBPUSD did move below its 100-day moving average (at 1.26344) for the 1st time since March earlier today, but found support against last week's low near 1.2615. The weaker data has now sent the price back toward a swing area between 1.2678 and 1.26988. That area should provide some resistance. If the price can stay below, the pressure remains distilled to the downside, but the 100-day moving average remains as formidable support along with the swing area down to 1.2590.
